Restoring Help to Buy would strengthen developers’ sales without solving the underlying affordability crisis facing first-time buyers, housing market commentator Charlie Lamdin has warned.
The founder of BestAgent intervened after Bellway chief executive Jason Honeyman called for a new Help to Buy scheme and the reversal of increased stamp duty costs for first-time buyers.
Taylor Wimpey has also called for renewed buyer assistance, including equity loans or property tax relief, while Barratt Redrow has argued that the absence of demand-side support is unusual within the UK housing market.
However, Lamdin claimed that increasing buyers’ purchasing power in a supply-constrained market would support higher prices rather than make homes genuinely more affordable.
DEVELOPERS SEEK DEMAND SUPPORT
The debate has intensified as weaker buyer confidence, elevated mortgage rates and affordability pressures affect reservations and developers’ order books.
Housebuilders argue that targeted assistance could help aspiring buyers raise deposits and support the demand needed to bring forward new developments.
Research published by Close Brothers Property Finance, the Home Builders Federation and Travis Perkins found that 84% of surveyed SME housebuilders believed insufficient first-time buyer support was preventing new sites from progressing.
One proposal was an equity loan scheme funded partly by developers.
Lamdin instead called for policymakers to examine mortgage lending multiples and extended loan terms, which he believed had sustained higher purchasing power and property prices.
“Help to Buy has caused irreparable damage to the housing market.”
Charlie Lamdin, founder of BestAgent, said: “Calls to bring back Help to Buy are dangerously short-sighted. They ignore its long-term impact on house prices and affordability and the millions of aspiring buyers it left behind.
“Housebuilders calling for another Help to Buy scheme is understandable, but we need to distinguish between stimulating demand and making housing more affordable. Giving buyers more money to spend in a supply-constrained market risks allowing sellers to charge more, not drive affordability.
“We’ve seen before the damage Help to Buy did to both buyers and the wider market, putting many of those who used the scheme in negative equity due to new home costs being inflated and then dropping in value. This has caused irreparable damage to the housing market.”
MARKET PROBLEM
And he added: “You cannot make homes more affordable by giving people more money to spend on them.
“The UK housing market doesn’t have a shortage of ways to borrow money – it has a market-function problem. It is slow, and purposefully confusing with too much focus on stimulating demand rather than improving the way the market actually works.
“If the Government genuinely wants to improve affordability, it should gradually reduce high lending multiples and longer mortgage terms, which have increased buyers’ purchasing power and helped sustain higher prices. Simply building more homes will not automatically make them cheaper if access to debt continues to expand.
“We should learn from Help to Buy, not repeat it.”
